Mortgage advice - porting and keeping or new long term loan

t2b

Hi there,

My mind is fried trying to work this one out so thought some of you guys could offer some advice. I've had my mortgage for 12 years, it ended up being one that became a tracker 1% above the base rate (HSBC Homebuyers mortgage) - which has been great.

I've recently bought a new house and have always thought I'd port my mortgage so I can keep the 1% tracker and just borrow the extra on a separate loan, which is totally possible. This would actually really make my monthly payments higher although I'd pay off the ported part in 13 years and ultimately be better off. However, the extra stress on the outgoings, coupled with more complicated life insurance etc. has started to put me off.

Now I'm thinking of taking a whole new product out, fixed for 2 or 3 years, but over 30 years for the life of the mortgage, thinking with the outgoings we're saving per month, we could just keep saving those and use it as a lump sum when we remortgage at the end of the fixed period, or even better, put it towards a loft conversion and unlock some extra value in the home. I've figured that this would save us around £3k per year in monthly outgoings on a 1.79% fixed over 2 years, although cost roughly £14k extra in interest over 30 years, if for the sake of argument that rates never went up (around £470 per year, £40 per month).

What would your recommendations be? I'm aware a lot can change in a couple of years, especially with the current economic climate, but with the higher outgoings that could be even more devastating if the ported part kept creeping up with rate rises over the next two years and then we were faced with the fixed ending as well.

I've got a very complicated page of numbers in front of me and can't quite decide what to do for the best!!!

Any comments will be greatly appreciated.

Many thanks.

t2b

Bump for any advice from moneysavers!